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IP Remedies After eBay: Assessing the Impact on Trademark Law

The Supreme Court's decision in eBay Inc. v. MercExchange, LLC, 126 S. Ct. 1837 (2006), changed the law regarding remedies in patent cases by rejecting the presumption that plaintiffs who prove that their patents have been infringed are entitled to injunctive relief. The Supreme Court held that, to obtain such relief, plaintiffs must now prove that (1) they have suffered an irreparable injury; (2) legal remedies, such as monetary damages, are inadequate to compensate for the injury; (3) the balance of hardships weighs in their favor; and (4) granting an injunction will not negatively impact the public interest.

What, then, if anything, is the potential impact of eBay on trademark law? In trademark law, like patent law (at least prior to the eBay decision), the case law reflects a strong presumption that injunctive relief goes hand-in-hand with a finding of liability, either in the form of trademark infringement or, more recently, dilution. Courts generally presume that plaintiffs suffer an irreparable harm when their trademarks have been infringed or diluted, and further that the public necessarily benefits when such infringement and/or dilution ceases to exist.

In the traditional trademark infringement case, one in which the defendant "passes off" his goods as those of the plaintiff, this remedial presumption intuitively makes sense. Both the injury to the public, who may have been tricked into buying defendant's inferior goods by his tortious imitation of plaintiff's mark, and the injury to the trademark holder, whose goodwill is consequently put at risk, will be difficult to measure and to undo. However, as trademark law has drifted from its moorings in the common law of unfair competition and morphed into a property-like right of the holder, the justification for these presumptions should be questioned. Particularly in cases which reflect a broader, propertized version of trademark law, such as cases based on a theory of initial interest confusion or post-sale confusion, application of eBay's mandate that courts review the merits of a request for injunctive relief, rather than rely upon formulaic assumptions to support the award of such relief, would be an improvement over the status quo.